Pakistan government to receive Rs. 10 billion from the sale of PIA
Pakistan
International Airlines’ fleet will be expanded to 64 aircraft in phases
following its privatization, Arif Habib, founder of the Arif Habib Group, said
while outlining the consortium’s plans after securing a majority stake in the
national carrier.
The Arif Habib Corporation Limited–led
consortium acquired a 75 per cent stake in PIA with the highest bid of Rs135
billion during an auction held on Tuesday as part of the government’s
privatization programme.
During the open bidding process,
Arif Habib raised the offer from Rs115 billion to Rs135 billion after the Lucky
Cement Limited–led consortium increased its bid from Rs101.5 billion to Rs134
billion in the second round.
Read More Privatization
of PIA completed with 75% stake sold to Arif Habib consortium
In an interview with a private television channel, Habib said the consortium had 90 days to complete the transaction and also intended to acquire the remaining 25 per cent stake, signaling interest in full ownership of the airline. He confirmed that Fauji Fertiliser Company Limited is part of the investor group.
Habib stated that the government
would receive Rs10 billion from the sale of the 75 per cent stake, while the
remaining 25 per cent is expected to generate Rs45 billion. Discussing
operational plans, he said PIA’s fleet would be increased to 38 aircraft in the
first phase and further expanded to 64 aircraft in the second phase. He added
that the airline currently carries liabilities of Rs190 billion, while its
assets are valued at approximately Rs180 billion.
Adviser to the Prime Minister on
Privatisation Muhammad Ali told Reuters that, subject to regulatory approvals,
the government expects the new owners to assume operational control of the
airline by April. He said the process would now move to final approvals by the
Privatisation Commission board and the federal cabinet, likely within days.
Contract signing is expected within
two weeks, followed by financial close after 90 days to meet legal and
regulatory requirements. Muhammad Ali said the transaction is designed to
inject fresh capital into PIA rather than simply transfer ownership.
Read More Over
90% of PIA’s privatization proceeds to be reinvested in the carrier
“We did not want a situation where the government sells the airline, takes the money, and the company still collapses,” he said.
He added that safeguards have been
built into the deal, including the retention of earnest money and an additional
payment at signing, enabling the government to approach the second-highest
bidder if the transaction fails to close.
On labour matters, Muhammad Ali said
the buyer is required to retain all employees for at least 12 months after the
sale on existing terms, noting that PIA’s workforce has already been reduced in
recent years.
The privatization is being closely
monitored by the International Monetary Fund, which has urged Pakistan to stem
losses at state-owned enterprises. According to the adviser, the successful
completion of the PIA deal will serve as a key test of Pakistan’s reform agenda
and could pave the way for future privatisations.
Source: Pro Pakistani